from washington the mclaughlin group the american original, for over three decades the sharpest talk. issue one. arab uproar. u.s. diplomatic missions were hit by two separate afax this -- attacks this week. both on tuesday, the anniversary of the twin showers, shanksville and penalty gone atrocities. in cairo, egyptian protesters scaled the walls of the u.s. embassy, desecrated a u.s. flag and raised a black islamic flag that praised the prophet mohammed. in libya, the attack at the

u.s. benghazi consulate turned deadly when they fired guns, burned the compound and burned the building. four americans were murdered including the embassy, christopher stevens. secretary of state hillary clinton condemned the benghazi crimes. >> how could this happen in a country we help liberate in a city we helped save from destruction? >> the attacks in both libya and egypt are linked to a film called innocent of muslims, made by a california-based director. the movie depictures the prophet mohammed as a quote unquote fraud and a philanderer. a 14-minute trailer of the film was dubbed into egyptian arabic and posted on youtube, thus shared on the internet, including the muslim world. by thursday, national protests

had spread to yemen, iran and elsewhere. the secretary of state bluntly separated the u.s. from the inflammatory film. >> the united states government had absolutely nothing to do with this video. we absolutely reject its content and message. but as i said yesterday, there is no justification, none at all, for responding to this video with violence. >> question, based on initial reports, can you deduce that tuesday's attacks were coordinated to coincide with the eleventh anniversary of our 9/11? pat buchanan? >> as it went into benghazi with rocket propelled grenades and guns and all of it, that was an orchestrated, organized attack maybe inside a really dramatic uprising. but john, what this shows is the total collapse or approaching collapse of the entire obama

policy of looking on the arab spring as a great glorious opportunity, we have helped liberate the libyans the egyptians, yemen, and we find our embassies in these cases as of friday, under attack. what happened is when the arab spring came along it liberated a lot of fores, ethnic national liz im, antiamericannism, all these forces, john. and the united states of america, there is a real dichotomy between the two of us, how do you get along when you can do a film, a video in los angeles that insults the prophet, something done in a basement, and it can set the entire region aflame against the united states? i think we have to look at our entire policy. >> eleanor? >> the implication is president obama could have somehow prevented these uprisings and i think that is a false assumption and some of the antiamerican sentiment that you see in egypt is because they think the u.s.

policy was far too long on the side of mubarak and repression. they don't look at us as great liberate tores and i don't think the president is putting us forward as the force that so-called liberated the middle east. these are democracies that are working their way through new government and dealing with extremist elements in their own midst. what happened in libya and egypt and other places are very different. in libya, protesters used rocket launchers to protest, so this was evidently a planned attack. probably had something to do with the 9/11 symbolism, we'll see. there are people under arrest. but the libyan government interceded. libyans carried the body of the embassy to the hospital and i don't think we can hold the libyan people or american foreign policy guilty for a handful of terrorists. and just as they need to root out terrorists in their society, and extremists in their

society, so do we. i mean this film was total propaganda and chairman of the joint chiefs of staff called that florida preach and told him he was endangering national security. i am not excusing what happened but to then condemn all of foreign policy is certainly not the answer. >> okay. the attacks, and after them, egyptian protesters were infuriated by the antiislammic film. massing at the u.s. embassy in cairo which issued a statement which read in quote the embassy of the u.s. in cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of muslims as we continue december muslims as we continue decemb all religions. unquote. the statement had no impact. the storage of the cairo

embassy went forward, followed by the deadly attacks in libya. mitt romney condemned the u.s. embassy's words as too weak. >> it is a, a, a terrible course for america to stand in apology for our values. they clearly sent mixed messages to the world, the statement that came from the administration was a statement which is akin to apology, and i think was a severe miscalculation. >> president obama was asked what he thought of mr. romney's remarks. >> there is a broader lesson to be learned here. governor romney has a tendency to shoot first and aim later. >> question. did governor romney make a mistake by criticizing president obama's handling of the protest? >> no he was absolutely right. the press release was atrociously stupid. it ate the language promoted by people who want to limit free

speech rights in order to avoid offending muslims and was meant to appease this mob and it failed in a peasing the mob because mobs don't read press releases from embassies before they decide to burn the place down and just a sign john of how utterly indefense sill this press release was, as soon as romney criticized it the white house said oh we had nothing to do with this and this doesn't represent our views. pat is absolutely right, president obama came in with the theory if he said he wasn't bush any more, if we wound down the wars, distanced ourselves from israel and made lots of soothing sounds, everyone in the middle east would love us. that theory has been proven definitively false. >> mort? >> i have to a i think governor romney's intervention was not very constructive, i was astounded by it. to me that was just an absolutely amateurish effort. nevertheless, having said that, i do think there is something fundamental that is going on

here and this was, and i believed it at the time and wrote it at the time, that the way we handled mubarak, our most loyal ally for 30 years was a disgrace as well. in that part of the world, you don't awand don our -- abandon your friends that way without it having real cost in your credibility and support. i thought it was a huge mistake. had nothing to do with this. it was a democratic election of a regime in egypt which was totally predictable. now the muslim brotherhood is there we have lost a major ally. >> john, the prime minister of turkey said in our part of the world democracy is a bus you get off when it reaches your stop. we helped overthrow and undermine mubarak and all these others, and what has risen up is a lot of noxious forces john in all these countries and in the majority of these countries do not like the united states of america. which means the whole arab spring idea pushing democracy,

we are going to have governments rise all through this area that are antiamerican, whether you like it or not. >> tell me how president obama could have stopped these revolutions from happening. social media, lots of young men without jobs, all of that came together. there is no single leader in this country, however exceptional we are, who could have kept a lid on that. and now it is up to our government to work with these new governments, and president morrissey now realizes he should have come out. >> hold on. hold on. >> and now he is trying to make up for that and we are not going to abandon egypt either. >> what is the first place president obama visited after he became president? >> cairo. he spoke. >> who did he speak to? >> the whole muslim community. >> what did he say to them? >> he said we favor democracy. all the things you like.

but the egyptian government whom we aid sat there and did nothing whieg while this attack on our embassy was going on. >> because he was playing to his domestic crowd. >> well fine. >> they don't like america. >> can i quickly try to split the difference here. >> hold on eleanor. >> i think eleanor is right, there is nothing obama could have done that would have saved mubarak. mubarak would not have been able to save himself short of taking a assad sort of murder and slaughter in egypt and if he tried that the military wasn't going to be with him. it was basically a military coup that happened in egypt but pat is right about how naive this administration has been about the muslim brotherhood. >> we are not. >> yes we have to be much tougher on them and hold their feet to the fire. >> that is exactly what obama is doing. >> now. >> no. and they are an elected government. so you deal with them.

>> okay. kindly relinquish let's go. mort? >> this is what the headlines are saying around the world. u.s. embassy in london burns american flag. protesters smash windows set fire at the u.s. embassy in to you nearby sha. german embassy in sudan on fire. clashs intensify near u.s. embassy in cairo. embassies on high alert as protesters spread. crowd in lebanon tortures kfc. what do you make of that? >> it is obvious what we have to make of it. this has been a trigger point for a rise in antiamerican sentiment around that whole part of the world and it also speaks, if i may say so, to the decline in the respect they have for the united states. we have a huge problem there, because we have a great deal that is dependent upon our support in the part of the world. >> we give $1.5 billion to egypt. do you think we should continue that aid? >> not if this continues with

this government. we have to be very careful about what we do now. >> john. >> what is the most danger that could result? >> look the whole region, john, the problem is antiamericannism and for reasons eleanor mention and others mentioned and mubarak is pandemic through this entire region. hold it. and our program is making democracies. but when a single item of video can set off something like that, the united states has to lower its profile. reduce troop presence and diplomatic presence and don't cut off aid to the president unless he says i can't defend the embassy. then we ought to do it. >> does this pose any kind of danger for the united states? >> danger? >> danger for our guys all over there john. that is why we don't have people in benghazi when those things go. >> no you don't want to immediately pull out and turn it into fortress america, you want to keep your presence.

but we are reliant on the host countries to provide protection. egypt did that, libya didn't. it is going to be very hard for president obama to go to congress and ask for that aid unless they really do show they are going to uphold the treaty with israel and that they are going to work to protect our diplomats. >> every dollar in aid can now be used as leverage. do you think a variety of countries will want to keep away from the united states? >> a lot of these governments and you saw with morrissey, he plays a double game. when these rat calls slow up at the embassy, he doesn't want to denounce them forthrightly or take action to stop them, because he is afraid of being out flanked to his right. but at the same time he is happy to take a billion dollars from the united states government every year. >> that is a balancing act every leader has to play. >> look these are not democracies in the general sense that they have that kind of control or support from their

people. we have to work with that kind of political community. we've lost their respect, we've lost the relationship with them. the saudis in particular. the egyptians of course under mubarak. this is a huge issue for the united states. we do not have allies in that part of the region and we need them. >> do you think that we could become isolationists by reason of this worldwide phenomenon? if that is what it is? >> we cannot afford to lose that region, in this sense. >> no. >> john we've lost it. antiamericanism is pandemic throughout that region. the polls show americans are disliked, detested, hated. >> that is not new. >> but what i'm saying is when you have got a simple, stupid video that can ignite this whole thing, we ought to realize that that is there and pull back for heaven's sakes. we can't alter or change the mind set of these people. east is east and west is west and never the dwayne shall

meet. >> that is classic president buchanan isolation. we are not going to draw a line. we can't withdraw from the world. the danish cartoon was the same. >> you have cartoonists and the whole place is. >> a out to create this. >> we are going to take a break. we'll be right back. k, and i was trapped.

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we have tried very, very hard and i think we have been successful at the federal reserve to be nonpartisan and apolitical and we make our decisions based entirely on the state of the economy, and the needs of the economy for policy accommodation. so we just don't take those factors into account and we think that is the best way to maintain our and maintain the trust of the public. >> question. the u.s. federal reserve has launched an open-ended program to ignite a recovery by injecting an extra $40 billion into the economy each month. how does the fed do it? it buys mortgage-backed securities. can you tell us more on this mort? >> yes, well the purpose of the thing is to improve the liquidity in the country and to keep interest rates very low. he will accomplish boeing objectives -- both objectives. the real problem is this is the

third effort of the same kind and it has had little effect in terms of getting the economy to grow. there is an argument it prevented the economy from getting worse, but right now we have made virtually no progress in four years with the biggest fiscal and monetary stimulus in our history. so you have to ask what is wrong here? one of the main things that is wrong is we are still trying to deal with what they call overleveraging. too much debt in the society. but the other thing, frankly is we miss judged and missical clade the -- miscalculated the fiscal stimulus. it was badly hurt structured and that did not give the economy the jolt it needed. >> you are talking about the public debt, which is $16.5 trillion? >> that's right. that is a huge amount of money, even for an economy like the united states. a stimulus program in the form of money try stimulus tends to benefit you in the short run, then the interest on the money begins to be a depressant. we are going to get to that point very soon and monetary policy is not going to be

effected. >> bernancke has made a huge shift here. now instead of worrying about inflation he decided unemployment is the biggest problem facing this society. he is saying he is going to take this action now, may take it the next month or the month after. he is now committed to getting this economy off the ground. i would argue with you we haven't made any progress, we did get saved from the great depression. we would be a lot worse off if the congress and the president didn't take these steps. but congress is not going to undertake any more stimulus. it is now in the hands of the fed and i commend mr. bernancke for shouldering the burden that is now his. >> this is six months before president obama is going to ask the american people to give him a second term. >> six months? >> it is eight weeks, john. i don't know the timing is influenced. i don't believe it is. i think bernancke is a good man. the timing is influenced by the fact he really is alarmed. but politically, this will help obama. you already saw the stock market, seeing all this new money. >> right.

>> come pouring in. >> right. >> and where does the money go? it starts chasing commodities and things like that. it could drive the market up, it is going up hundreds of points and that is clearly going to help barack obama with a huge part of that 1% and 10% that he is not so well off with. >> employment is the real issue. will this help employment? >> we know that already. in the short-term no. >> i think that is politically much more significant. this will help the op ticks -- optics, doesn't make the labor force participation any better. three and a half years after the recession this economy is still held together with wire and duct tape. the recession ended before most of the stimulus had a chance to kick in. >> you understand the morale of the country is low? >> yes. >> this is bound to have some elevating effect on the morale. >> i don't know. i think most people. >> the overall feeling.

>> most look at the stock market and say i know a cousin or neighbor who lost their job. i feel better because the federal reserve is inflating the stock market. >> it is an amphetamine and people will think better, and it may be marginal, but it is positive on net for barack obama. >> lift up the phone and call him up, did he? >> he didn't tell him to do it. >> a message. >> i think the president would have been very unwise to call the head of the federal reserve. that is an independent agency. >> they all say that. >> listen i tell jew so you send an emissary over there. >> when you find out for sure that conversation took place, call me. >> this is all hypothesis. in point of fact there is a political pay off, there would appear. not much of a downside,. >> i agree with that. but this is not going to have very much of an upside in six

or eight weeks. the real issue is how bad is the economy today for how many people? and that is going to be laid at the doorstep of the president, like it or not. >> if you were president you lift up that phone and say hey ben, you thought of this? >> i would never do that. >> bernancke reads the papers, come on. >> you remember nixon? >> he only has to read the newspapers to see how the economy is hurting. i think he sits there and says i'm going to put my finger on the scale for obama. >> his term is almost up. >> john here's what really worries me. the federal reserve has more information about the economy than any other place in the united states. >> right. >> and when he looks at the economy and sees how bad it is and does this, you can imagine what his private information is about the economy. it just tells you something about how bad the economy is. >> the economy is bad but obama is winning in the polls, and this is a small net positive for obama. i don't see how you can say otherwise. >> you think you can drive the

unemployment from 8.2 to 7%? >> not going to now. >> it won't? >> it hasn't in the past, not going to now, certainly not before the election. >> it is a tonic. and it may not take effect before the election. the economy needs it, he is doing the right thing. >> is there more to bernancke than meets the eye? we'll be right back with predictions.

pricks. pat? >> obama's called bluff there will be no strike on iran before the election. president clinton's speech skillfully framed the arguments in obama's favor and his campaigning in florida will carry the state for obama and thereby, the election. >> mr. rich? if republican panic over the polls continues you you'll see sharp knives come out for stephens, running the cap pain. mort? the unemployment numbers will get worse and it will have a huge effect on the outcome of the election. a majority of the united nations member will support the internet pitting the united states and western countries against the global community. bye bye.